Positive Results Across the Entire Dayton Resource Area
Virginia City, NV (February 28, 2011) — Comstock Mining Inc. (“Comstock Mining” or “the Company”) (OTCBB: LODE) announced the successful completion of the first phase of drilling at its Dayton Resource Area (the “Dayton”). The drilling at the Dayton commenced on December 3, 2010, and concluded on February 18, 2011. Having completed this phase, the Company’s drilling activities moved to the East-side exploration target, in the Lucerne Resource Area.
As previously announced, this phase of Dayton drilling was designed as a series of three east-west “drill fences”, or rows of drill holes. These fences were designed to achieve two objectives: first, to test the continuity of mineralization to greater depths than the previous, generally shallow drilling; and second, to validate and calibrate the Company’s exploration model in the Dayton. Both objectives have been met. A second phase of Dayton drilling is being designed and scheduled, based on the first phase results, to provide information for a detailed mine plan.
Dayton First-Phase Results
Three drill rigs were used in the Dayton phase one program, to drill a total of 39 reverse circulation (RC) drill holes, totaling 18,886 feet. Three east-west trending drill fences (a south, central and northern fence) were completed perpendicular to the northerly strike of the previously-identified mineralized zone. The spacing between the drill fences was approximately 600-800 feet. In addition, the efficiency of the drilling program allowed the initial holes to be drilled on two intermediate drill fences.
Dayton Phase 1 Drill Fences
“We’re excited because our drill results continue to validate our geologic model,” said Larry Martin, Comstock Mining Chief Geologist. “The intent of our first-phase program was to calibrate the Dayton structural model. We confirmed significant mineralization along all three east-west fences, while the south and central fences found thicker mineralization than historic drilling led us to believe.”
The Company’s geological professionals are now combining the new drill results with the results from previous drilling, surface mapping and sampling, and historic underground data, to create a consistent, detailed geologic model for the Dayton area. A preliminary geological interpretation for the south drill fence is shown below.
Dayton South Fence Preliminary Geologic Interpretation
The second phase of drilling at the Dayton will be an infill drill program, based on the detailed geological model. The infill drilling will be designed with closely-spaced drill holes to provide the information necessary for an optimal mine plan. This drilling is scheduled to begin after the current East-side target exploration drilling is complete.
Significant Mineralized Intervals
A sample from each five-foot interval in each drill hole has been sent for analysis to American Assay Labs, of Reno, Nevada, a certified independent laboratory. Assay results have been received to date for 20 of the 39 holes in the program, including all of the holes on the south fence, and approximately half of the holes on the central fence.
Intervals of significant mineralization were encountered in each of these first 20 holes. Many of the holes also encountered the deeper, silver-only mineralization that was first encountered in D10-01, the first hole in phase one. Significant assay results and mineralized intervals from holes in the south and central fences are listed below. The results for D10-01, which were included in the January 18, 2011 press release, are repeated here for completeness.
Dayton First Phase Drill Hole Intercepts
“We continue experiencing exceptional productivity in this drill program with almost every hole on the Dayton hitting significant mineralization,” stated Mr. Corrado De Gasperis, Comstock Mining Chief Executive Officer. “This should result in a meaningful expansion of our mineral resource and we look forward to the second phase of drilling that will validate the larger resource and result in completing our mine plan for production. We continue hitting instances of higher gold grades and silver-only mineralization that present encouraging possibilities for future exploration results.”
Ongoing Drilling Programs
With completion of phase one of the Dayton Resource Area drilling, two RC rigs have moved to the Lucerne Resource Area. A drill program there will further delineate the Company’s promising East-side exploration target. The focus will remain on this area while the Company’s geological team completes its planning for the second phase of Dayton drilling.
Mr. De Gasperis concluded, “We are pleased with the exceptional productivity of our Dayton drilling and the pervasive nature of the gold and silver resource we are validating throughout this resource area. We expect continued positive results from the remaining Phase One assays and our team has already begun the process for a second mine plan and ultimately a second mine on the Comstock.”
About Comstock Mining Inc.
Comstock Mining Inc. is a well-capitalized, Nevada-based gold and silver mining company with extensive, contiguous property in the Comstock District. The Company began acquiring properties in the Comstock District in 2003. Since then, the Company has consolidated a significant portion of the Comstock District, amassed the single largest known repository of historical and current geological data on the Comstock region, secured permits, built an infrastructure and brought the exploration project into test mining production. The Company continues acquiring additional properties in the district, expanding its footprint and creating opportunities for exploration and mining. The goal of its strategic plan is to deliver stockholder value by validating qualified resources (at least measured and indicated) and reserves (probable and proven) of 3,250,000 gold equivalent ounces by 2013, and commencing commercial mining and processing operations in 2011, with annual production rates of 20,000 gold equivalent ounces. At December 31, 2010, the company had cash, cash equivalents and investments of $30 million.
Cautionary Note to U.S. Investors
This press release uses the terms resources in the context of “measured resources,” “indicated resources,” “inferred resources,” and “historical resources” which are calculated in accordance with the Canadian National Instrument 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Classification system. The United States Securities and Exchange Commission (the “SEC”) does not recognize these terms and the SEC guidelines (Industry Guide 7) provide that such terms shall not be included in a registrant’s filings with the SEC (unless required to be disclosed by foreign or state law). The SEC permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. “Inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. U.S. investors are cautioned not to assume that any part or all of a measured, indicated or inferred resource exists or is economically or legally mineable. U.S. investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from the SEC’s website at http://www.sec.gov.
This press release and any related calls or discussions may contain forward-looking statements. All statements, other than statements of historical facts, are forward-looking statements. Forward-looking statements include statements about matters such as: future prices and sales of and demand for our products; future industry market conditions; future changes in our exploration activities, production capacity and operations; future exploration, production, operating and overhead costs; operational and management restructuring activities (including implementation of methodologies and changes in the board of directors); future employment and contributions of personnel; tax and interest rates; capital expenditures and their impact on us; nature, timing and accounting for restructuring charges, gains or loses on debt extinguishment, derivative liabilities and the impact thereof; productivity, business process, rationalization, restructuring, investment, acquisition, consulting, operational, tax, financial and capital projects and initiatives; contingencies; environmental compliance and changes in the regulatory environment; offerings, sales and other actions regarding debt or equity securities; and future working capital, costs, revenues, business opportunities, debt levels, cash flows, margins, earnings and growth.
The words “believe,” “expect,” “anticipate,” “estimate,” “project,” “plan,” “should,” “intend,” “may,” “will,” “would,” “potential” and similar expressions identify forward-looking statements, but are not the exclusive means of doing so. These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical and current trends, current conditions, possible future developments and other factors they believe to be appropriate. Forward-looking statements are not guarantees, representations or warranties and are subject to risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements. Some of those risks and uncertainties include the risk factors set forth in our SEC filings and the following: the current global economic and capital market uncertainties; the speculative nature of gold or mineral exploration, including risks of diminishing quantities or grades of qualified resources and reserves; operational or technical difficulties in connection with exploration or mining activities; contests over our title to properties; potential dilution to our stockholders from our recapitalization and balance sheet restructuring activities; potential inability to continue to comply with government regulations; adoption of or changes in legislation or regulations adversely affecting our businesses; business opportunities that may be presented to or pursued by us; changes in the United States or other monetary or fiscal policies or regulations; interruptions in our production capabilities due to unexpected equipment failures; fluctuation of prices for gold or certain other commodities (such as silver, copper, diesel fuel, and electricity); changes in generally accepted accounting principles; geopolitical events; potential inability to implement our business strategies; potential inability to grow revenues organically; potential inability to attract and retain key personnel; interruptions in delivery of critical supplies and equipment raw materials due to credit or other limitations imposed by vendors; assertion of claims, lawsuits and proceedings against us; potential inability to maintain an effective system of internal controls over financial reporting; potential inability or failure to timely file periodic reports with the SEC; potential inability to list our securities on any securities exchange or market; and work stoppages or other labor difficulties. Occurrence of such events or circumstances could have a material adverse effect on our business, financial condition, results of operations or cash flows or the market price of our securities. All subsequent written and oral forward-looking statements by or attributable to us or persons acting on our behalf are expressly qualified in their entirety by these factors. We undertake no obligation to publicly update or revise any forward-looking statement.
Neither this press release nor any related calls or discussions constitutes an offer to sell or the solicitation of an offer to buy any securities.
Contact information for Comstock Mining Inc.:
P.O. Box 1118
Virginia City, NV 89440
Tel (775) 847-4755
Fax (800) 750-5740